Marcellus Drilling News

Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

Status Report on PA Royalty Bill HB 1684 – Recess Limbo
May 12, 2014May 12, 2014

As MDN told you three weeks ago, Pennsylvania House Bill (HB) 1684 has hit some turbulence on its way to quick passage (see PA HB 1684 Guaranteed Minimum Royalty Act Hits a Snag). The bill, as originally introduced, was supported by the PA chapter of the National Royalty Owner’s Association and would provide for landowners to receive a minimum 12.5% in royalties, disallowing some of the shenanigans Chesapeake Energy has engaged in with reducing post-production expenses via a back door (see PA NARO Alert: Tell Your State Rep to Vote YES on HB 1684).

But along the way the drilling industry objected–rather loudly–saying lease contracts signed by two parties, the landowner and the driller, should not be modified by the legislature (see Rare Schism Between Landowners & Drillers over PA Royalty Law). Since the original bill, a number of amendments have been proposed, one of them that may well get adopted, that would fundamentally gut the intention of the bill to provide a minimum 12.5%. Lawmakers debated HB 1684 and amendments last week–before adjourning and heading out of town for a 3-week recess (wish we had a 3-week vacation whenever we wanted!). Here’s a status report and update on what happened last week and where things now stand with HB 1684…
Read More “Status Report on PA Royalty Bill HB 1684 – Recess Limbo”
Chesapeake Energy | Energy Companies

Chesapeake’s CEO Celebrates Axing 1,200 People Making Carl More $
May 12, 2014May 12, 2014

We’re not sure there’s all that much to celebrate at Chesapeake–unless you’re Doug Lawler, Carl Icahn’s toady who’s axed over 1,200 people (see The Great Chesapeake Massacre: Lawler Fires 800 People in One Day) and sold off everything but the kitchen sink. Doug managed to increase production a paltry 11% in first quarter 2014 while hacking away at just about everything. Big whoop.

Excuse us if we don’t join in the victory lap now being taken by Lawler after he decimated the company’s people on his way to making corporate raider Carl Ichan more money in 1Q14…
Read More “Chesapeake’s CEO Celebrates Axing 1,200 People Making Carl More $”
Industrywide Issues | Pennsylvania | Research | Statewide PA

PA DEP Publishes First Annual O&G Report + Video (Very Cool)
May 12, 2014May 12, 2014

Last week the Pennsylvania Dept. of Environmental Protection (DEP) published their first-ever Oil and Gas Annual Report–for the year 2013 (full copy below). The report celebrates the miracle of fracking shale in PA and the DEP’s hard work to keep it safe. Along with the report (with a lot of great information) the DEP has released a video starring some of the hard-working people for the Office of Oil and Gas Management. It is a FABULOUS video–we’ve embedded it below. Please give it a watch and as you have time, peruse the 31-page first-ever Annual report.

First up, the DEP press release announcing the report and its raison d’être…
Read More “PA DEP Publishes First Annual O&G Report + Video (Very Cool)”
Hydraulic Fracturing | Industrywide Issues | Regulation

Rogue Federal EPA Tries New Power Play to Regulate Fracking
May 12, 2014May 12, 2014

On Friday the rogue and out-of-control federal Environmental Protection Agency continued its rogue and out-of-control ways. Even though the drilling industry has formed FracFocus.org to register the chemicals used at every single well drilled, and even though many states require their drillers to file reports with FracFocus, and even though anyone, including you and me as well as the EPA can run a quick search on any well to find out what chemicals have been used–the EPA is considering their own rule on reporting. On Friday the EPA issued an Advance Notice of Proposed Rulemaking (ANPR, full copy embedded below) that threatens to bring down the jackboots of the EPA on the necks of drillers everywhere–requiring them to do what they already do. In their ANPR the EPA says maybe new regulations will be federal regs (in violation of the U.S. Constitution which stipulates the states regulate oil and gas drilling), or maybe it will be voluntary, maybe it will be just a report filed with the feds, maybe a report filed with a third party (like FracFocus). Lots of maybes in the generic, mealy-mouthed ANPR.

Make no mistake. This is the beginning of a huge power grab–something the EPA has lusted for. The clock is ticking on the failed Obama administration and they want to grab any power–by law or fiat–that they can. The EPA has NO business regulating oil and gas drilling in the United States–unless we hand it to them on a silver platter. Once published in the Federal Register there will be a 90-day comment period. Let’s flood the power-crazed EPA with comments telling them “no thanks.” Below is the EPA press release along with a copy of the draft ANPR…
Read More “Rogue Federal EPA Tries New Power Play to Regulate Fracking”
Anti-Drilling/Fossil Fuel | Bradford County | Economic Impact | Hydraulic Fracturing | Industrywide Issues | New York | Pennsylvania | Statewide NY | Statewide PA | Steuben County

PA Farmers Flourish Thanks to Marcellus While NY Farmers Fail
May 12, 2014May 12, 2014

A rather long, and surprisingly pretty balanced, article appeared over the weekend in The Buffalo News comparing and contrasting Pennsylvania and New York’s approach to the issue of shale drilling. The reporter actually talked to a number of sources on both sides of the drilling issue and wrote a good article that presents the facts of the economic miracle happening in PA, and the economic misery happening in upstate NY because of our state’s dithering. You can tell it’s a good article when the cadre of about a half dozen anti-drillers (pathetic people with no lives apart from opposing drilling) flock to the comments to condemn the article and condemn those who dare to post a positive comment about drilling.

The article opens with the classic tale of two cities theme, comparing the fortunes (or lack thereof) of two farmers on opposite sides of the NY/PA border…
Read More “PA Farmers Flourish Thanks to Marcellus While NY Farmers Fail”
Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

Sunoco Builds Stronger Case for Mariner East as Public Utility
May 12, 2014May 12, 2014

Brilliant move or manipulating the system? Your view will depend on your drilling proclivity. Late last week Sunoco Logistics, in a bid to strengthen its case before the PA Public Utility Commission (PUC) that the Mariner East pipeline should be considered a public utility, filed an application to deliver propane from western PA to its Twin Oaks terminal in Delaware County (eastern PA) using the Mariner East. By delivering propane from one end of the state to the other and redistributing it to customers in that area, Sunoco is attempting to prove that it is a public utility under PA’s definition.

MDN has chronicled Sunoco’s fight to use eminent domain against some recalcitrant landowners who refuse to allow the pipeline to cross their property in western PA, and homeowners in eastern PA who don’t want new compressor stations built along the pipeline’s existing route (see Sunoco Logistics Faces Hostile Crowd Over NGL Pipeline Station). Sunoco claims they are a public utility corporation with the right of eminent domain. Anti-drillers (and possibly some pro-drillers) fighting them claim they are not a public utility. The case is before the PA PUC and Sunoco has just hired attorney Michael Krancer and the legal beagles from the Blank Rome law firm to help out (see Sunoco Hires Big Gun Law Firms to Help Complete Ethane Pipeline). Looks like the legal assist is already paying off with this new strategy…
Read More “Sunoco Builds Stronger Case for Mariner East as Public Utility”
Anti-Drilling/Fossil Fuel | Housing | Industrywide Issues | Pennsylvania | Regulation | Washington County

Washington, PA Officials Try to Stop Marcellus Boarding House
May 12, 2014May 12, 2014

In early February MDN told you about the rank hypocrisy of those in Washington, PA who are trying to block the rehabilitation of an old, unused and in-disrepair convent from being converted into housing for Marcellus Shale workers (see Marcellus Prejudice on Display at Washington, PA Church). The story has advanced since then. Seems that a second developer has picked up the property from the original buyer with the same thought. The new developer, Phive Starr Properties, is proving to be a tad more assertive.

Phive Star had the gall to tell Washington officials last week that there’s a big old hole in their zoning laws and that by provisions in their own laws the city can’t keep out a boarding house in the former convent property. Which has city officials “scrambling” (and butt covering) to see if there’s anyway they can still prevent it…
Read More “Washington, PA Officials Try to Stop Marcellus Boarding House”
Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

New Issue: Ban Use of Cheap/Imported Steel Pipes in PA Marcellus?
May 12, 2014May 12, 2014

A new issue comes to light–for us anyway. The chairman of the Pennsylvania Public Utility Commission, Robert F. Powelson, writes an editorial in today’s Philadelphia Inquirer that claims America’s steel industry–in particular PA’s steel industry–is suffering from cheap steel pipeline imports from places like South Korea. The pipeline imported is used in shale drilling, namely in gathering pipelines and perhaps larger transmission pipelines. A lot of pipeline is also used during the drilling process itself. Powelson says “oil country tubular goods” or OCTG pipeline is illegally “dumped” on the market–meaning it’s sold below the cost to manufacture it. And that cuts some of the economic benefits PA would otherwise realize if PA or OH steel plants created that pipe.

Powelson’s proposed fix? Amend the Pennsylvania Gas and Hazardous Liquids Pipeline Act (Act 127) and require companies to report to the PUC the country of manufacture of the steel pipe used to transport natural gas from unconventional wells in PA. Would that work?…
Read More “New Issue: Ban Use of Cheap/Imported Steel Pipes in PA Marcellus?”
Economic Impact | Industrywide Issues | Jobs | Pennsylvania | Supply Chain | Washington County

Small Businesses Target Marcellus Industry in SW PA
May 12, 2014May 12, 2014

We’re always amazed at how many businesses find new work and new sources of revenue–which leads to expansions and new jobs–because of the Marcellus and Utica Shale. It is an economic engine like nothing we’ve seen in our lifetime. Not even Obama spending your money like a drunken sailor can come close to matching the economic miracle created by the Marcellus Shale. (Reminder: Every time the government spends money it comes from YOU and it destroys wealth–it never creates wealth.)

Recently a sign shop and a screen printing business (think customized t-shirts) in Washington County, PA merged to form a new business. That new business has just opened a second location in the heart of the Washington, PA business district. The main attraction? You guessed it–the Marcellus Shale and all of the businesses it’s attracting. The new sign sign shop, which bills itself as a “business branding company,” is targeting, in part, companies in the Marcellus supply chain…
Read More “Small Businesses Target Marcellus Industry in SW PA”
Best of the Rest

Marcellus & Utica Shale Story Links: Mon, May 12, 2014
May 12, 2014May 12, 2014

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
Read More “Marcellus & Utica Shale Story Links: Mon, May 12, 2014”
Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | New York | Pennsylvania | Regulation | Statewide NY | Statewide PA

Feds Attempt a Power Grab of Delaware River Basin
May 9, 2014May 9, 2014

New York Sen. Chuck Schumer earlier this week paid nominal lip service to the marvels of shale drilling (see Sen. Chuck Schumer Supports Fracking in NY – Sort of). Although some on the pro-drilling side didn’t like MDN’s take on the gasbag Schumer and his false support of drilling, we offer evidence of his true intentions. Yesterday Schumer and six other senators (all liberal Democrats) introduced a bill to “preserve and improve [the] Delaware River Watershed.” The so-called “Delaware River Basin Conservation Act of 2014” would “establish the Delaware River Basin Restoration Program within the U.S. Fish and Wildlife Service. The program would implement a coordinated approach, requiring the U.S. Fish and Wildlife Service director to adopt a basin-wide plan that sustains and enhances the Delaware River basin restoration and protection efforts. The program would support projects from federal, state, and local governments and stakeholders, ensuring that existing successful restoration plans are leveraged.”

Translation: The feds want to trample over the states and take over the Delaware River Basin, which means there never will be any shale drilling in places like Wayne County, PA which happens to sit in the basin. It’s a horrible bill–a federal power grab–and it needs to be opposed. Vigorously. Thanks Chucky, for your so-called “support” of shale drilling. Schmuck. An even bigger schmuck is Sen. Bob Casey–from Pennsylvania! He’s one of the seven lib Dem senators sponsoring this abomination…
Read More “Feds Attempt a Power Grab of Delaware River Basin”
Exporting | Industrywide Issues

Marcellus Gas Bound for Nova Scotia? Yes, if Emera Can Swing It
May 9, 2014May 9, 2014

Halifax energy conglomerate Emera Inc. wants to be the natural gas supplier to the Maritimes. But in order to do it, it appears that they will need to get Marcellus and Utica Shale gas from the U.S. And in order to do that–they need a pipeline. Fortunately Emera owns a 12.9% stake in the Maritimes and Northeast pipeline, which can help them do just that. It’s far from a controlling interest–but enough to (hopefully) persuade the operator to start flowing gas northward.

Here’s the story of Emera, which happens to have “some very significant relationships” with Marcellus drillers…
Read More “Marcellus Gas Bound for Nova Scotia? Yes, if Emera Can Swing It”
Anti-Drilling/Fossil Fuel | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Susquehanna County

Lawyer for NEPA Anti-Driller Vera Scroggins Tries Legal Maneuver
May 9, 2014May 9, 2014

A lawyer for little-known (outside of northeast Pennsylvania) anti-driller Vera Scroggins was in court in Susquehanna County earlier this week trying out the latest legal maneuver. Anti-drilling lawyer Gerald Kinchy–from Sayre, PA–was trying to sucker Judge Kenneth Seamans into “joining” landowners leased with Cabot Oil & Gas to the lawsuit. That is, the lawyer wants the court to treat landowners the same way it’s treating Vera–consider them as trespassing on their own land. Sound like convoluted legal fleecing? Well, that’s exactly what it is. And the judge wasn’t having any of it.

The whole thing got started when Vera started trespassing at Cabot Oil & Gas drilling sites, taking busloads of fellow anti-drillers around to point and gawk and claim Cabot was polluting Mother Earth. Cabot finally had enough and got the court to place a restraining order on her–for her own and others’ safety (see NE PA Anti-Driller Slapped with Trespassing Injunction). Since the restraining order disallowed Vera from stepping foot on any property leased by Cabot, it prevented her from visiting her favorite grocery store, among other things. So at Cabot’s request, the judge eased the restrictions just a bit (see Judge Lets PA Anti-Driller Sip More Lattes, Attorney Claims “Big Win”). She’s still banned from active drill sites, and that apparently irritates Vera. So she got the ACLU to take up her cause and defend her. Now, her lawyer from Sayre is trying to pollute the case before it goes to trial in June (maybe having second thoughts?)…
Read More “Lawyer for NEPA Anti-Driller Vera Scroggins Tries Legal Maneuver”
Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

OH Repubs Sell Out on Severance Tax, Kasich Wants Even More!
May 9, 2014May 9, 2014

As we predicted, Ohio Republicans caved and voted a high severance tax out of committee on Wednesday (see Bend Over Ohio – You’re About to Get a Frack Tax). The Republicans think it’s fine to steal money from one industry to give away to people who didn’t earn it. The Democrats are even worse. But here’s the funny thing. Ole’ Gov. John “foreigner hunter” Kasich isn’t satisfied with the Republican plan to raise the rate to 2.5%. He wants more (more more more!).

Since the Repubs have already bent over once, will they do it again for Kasich?…
Read More “OH Repubs Sell Out on Severance Tax, Kasich Wants Even More!”
Energy Companies | Industrywide Issues | Lease & Royalty Payments | Olympus/Huntley & Huntley | Pennsylvania | Range Resources Corp | Regulation | Westmoreland County

Murrysville Turns Down Millions for Park Lease, Looks to Tighten Regs
May 9, 2014May 9, 2014

Final answer: No. Murrysville (Westmoreland County), PA Council voted to turn down millions of dollars to lease the 262-acre Murrysville Community Park for drilling under (not on) the park for shale gas. Huntley & Huntley–a company that often works as a land agent for Range Resources–has been courting Murrysville for nearly a year now (see Murrysville Park Lease to be Discussed at Meeting). In the end, it seems there just wasn’t enough support from residents to go forward. Guess they don’t need an extra pile of cash in Murrysville. They have enough, thanks.

Now, on to more pressing matters for the council–like crafting new zoning laws that make it hard to drill anywhere within the township…
Read More “Murrysville Turns Down Millions for Park Lease, Looks to Tighten Regs”
Anti-Drilling/Fossil Fuel | CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Maryland | Statewide MD

Anti-Drillers File Complaint with SEC re Cove Point LNG Facility
May 9, 2014May 9, 2014

Even though they’ve lost, the obstinate and unreasonable (not able to be reasoned with) people at Earthjustice and the Chesapeake Climate Action Network (CCAN) are once again trying to prevent the inevitable–the Cove Point, Maryland LNG export facility. Dominion is the company building the new LNG export facility at Cove Point. On the eve of Dominion’s annual shareholder meeting, Earthjustice and CCAN attempted a publicity stunt by filing a complaint with the Securities and Exchange Commission saying that Dominion has not provided adequate disclosure of financial and environmental risks in their plans to build the new $2 billion facility.

It’s just one more lame attempt by the same small group of virulent anti-drillers plus a ninny nanny anti-drilling investor from Trillium Asset Management (don’t ever invest money with Trillium) to stop progress…
Read More “Anti-Drillers File Complaint with SEC re Cove Point LNG Facility”